Accounts receivable for plumbing work as at 31 March 2020 amounted to $4,600, GST inclusive.

accounting

Description

Additional information for the plumbing partnership business:

 

1         At 31 March 2020 there was cash on hand (contract income not banked) of $2300, GST inclusive.

 

2         Accounts receivable for plumbing work as at 31 March 2020 amounted to $4,600, GST inclusive.

 

3         Accounts payable at 31 March 2020 were for purchases of plumbing materials, $2,760; advertising, $230, PAYE of $460 and motor vehicle expenses, $368. These amounts are GST inclusive, as applicable.

 

4          During the year plumbing materials of $1,380, GST inclusive, were taken from the business for Kevin to complete private plumbing work around his private house.

 

5         Inventory at 31 March 2020 was $4,250, cost price GST exclusive.

 

6         “Entertainment” relates to entertaining clients at local restaurants and cafes, $1,200 and renting a corporate box at Westpac Stadium for a “Super 15 Rugby match”, $2,800 for major clients. Food and drinks were served at the corporate box during the game.

 

7         Sponsorship is for purchasing T-Shirts for Kevin’s son’s junior hockey team. The T-Shirts don’t have the firm’s name imprinted on them. No formal contract is in place for the sponsorship.

 

8         Insurance payments were for:

·               Health and accident policies for Kevin and Mike, equally – total $3,600. The partners are to receive any entitlements arising from claims against these policies.

·               Loss of business profits - $1,750.

·               Plant, machinery and inventory (business) - $2,400.

 

9         Interest paid relates to:

·               Interest on initial capital contributed by Kevin, $2,000; and Mike, $2,000

·               Interest on Kevin’s advance (for business purposes) - $600 (No RWT deducted)

·               Interest on temporary bank overdraft, $460.

 

10      A proper logbook kept 2 years ago established 72% business usage.

 

11      Repairs and maintenance comprise:

·               Leasehold improvements: Major building alterations to the office to enlarge the area and include a kitchen – building work, $10,000; electrical work, $1,500. This work was carried out and completed in May 2019.

Painting the internal office area, $1,500, on 30 September 2019

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